As old, regular readers will know, I have been boring on for years about the cracks and fissures that lay behind the inscrutably smug mask of Chairman 'Xi-ping-a-ling'. My suspicions were aroused years ago by the sight of all those brand new cities they built but which were occupied by no-one. That shrieked 'crooked money' to me and it could only have happened with governmental connivance.
Today, Leo Austin (and no, me neither!) has an interesting article on the CAP-X site headed "China's economy runs on corruption - and the state is scared". So it should be because, in the end, you cannot dodge the inevitable laws of economics.
Small-scale corruption is endemic in China. Every time a company wins a tender, or an agency is retained, or a salesman selects a distributor, a deeper relationship is revealed than that which is shown in the contract.
The impact of corruption on China’s economy is much larger than its cost in cash. These choices distort the market. They make it hard for new entrants to get a first break. They lead to bad choices on government investments, to the sustained use of the wrong technology, to the wrong manager getting the job. They add costs to every single part of the economy.
Well, to a greater or lesser extent that could describe the internal mechanisms of many different countries but not many of them have the all-pervasive, governmental controls with which the Chinese Communist Party grips its people down to street level.
Where does this corruption come from? Part of it is driven by the unfairness of incomes and a lack of opportunity. The state system was designed to keep people in their place and the Chinese people have raged against it for decades.
China has had a ‘hukou’ (or similar) household registration system for a thousand years now, which identifies and determines the rightful home of each individual, the place where they enjoy state education and medical services. If you are very lucky this is Beijing, Shanghai, Guangzhou or Shenzhen. These days, any provincial city is a reasonable outcome. But for most people it is a rural county.
In the end, like dry rot in a basement, this inherent encouragement of corruption will bring the house down and it can't come quick enough in China!
"Potemkin villages" all the way down. Preserve the State at all costs. Let the people starve if necessary. I hope this ongoing long over due trade war with the Chinks is the start of a major decoupling from Communist China. It would be healthy as well as a blow for global security against communism.
Posted by: Whitewall | Thursday, 19 September 2019 at 12:03
Don't hold your breath waiting for China to fall, David. Despite its dodgy and shifty economic model, aging population and massive debt, it has some advantages. Maybe the biggest is that the US has currently withdrawn from the world in most meaningful ways. China's also still building on its empire of emerging nations by funding business and infrastructure around the world, especially in Africa. They also excel in technology. In fact, I know of a certain European country that just bought a lot of 5G technology from them.
China is also capable of abrupt modernization. Deng Xiaoping's initiatives of the 1970s were largely successful. Just because they don't have a common history or share all Western values doesn't necessarily mean they're doomed.
Posted by: Bob | Thursday, 19 September 2019 at 16:03
Hukou sounds like quite a good idea.
We could have two Hukou zones: one for all the country-bumpkins and one for the metros - just like them.
Oh, I forgot, we already have - albeit informal. Unwritten, like the bloody constitution - hahah!
Well, moving rapidly along, let's formalise it with the metro Hukou zone staying in the EU and the country-bumpkin Hukuo zone doing no-deal.
And we see who fares the best in 10 years time. (Yes, I am a gambling man and I am taking bets).
What's not to like?
OK, an internal border in Blighty. But BoJo's planning 6 freeports each one of which will need a border. So Hukou is 5 less borders.
Brexit sorted, ping-a-ling styleee!
SoD
Posted by: Loz | Thursday, 19 September 2019 at 16:20
What a good idea! The C-B Hukuos stop supplying food. They cut off the water supply to those smart metros. The Army and Navy, manned by the C-Bs shell the metros. The transport links between metros are cut.
Endless fun .
Posted by: backofanenvelope | Thursday, 19 September 2019 at 18:45
During a tour of China some years ago, I was told the construction programme is such that, as China uses more than 40% of the world's supply of concrete annually, if it carries on as it is then, in less than 50 years, humanity will need to find another planet!
I was also informed that the Chinese don't like to buy properties which have been lived in by strangers, and so they buy houses and keep them empty as they realise higher prices on the housing market when they come to sell them. Very inscrutable.
Posted by: Penseivat | Friday, 20 September 2019 at 09:53